{"id":12162,"date":"2016-01-29T09:51:53","date_gmt":"2016-01-29T15:51:53","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=12162"},"modified":"2016-03-24T10:24:40","modified_gmt":"2016-03-24T15:24:40","slug":"why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2016\/01\/29\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\/","title":{"rendered":"Why this Utility Giant&#8217;s $4-billion Coal Bailout is an Ill-Fated Energy Strategy"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright\" src=\"https:\/\/d1taatozpbffx3.cloudfront.net\/cdn\/farfuture\/EDJTYJUlnnGqPnAYt3km9prqOERW64XNomnoiPAtZ1s\/mtime:1454048564\/sites\/default\/files\/coal_287x235.jpg\" alt=\"\" width=\"387\" height=\"235\" \/>Clean energy investments are soaring worldwide, and the United States is no exception with $56 billion going toward renewable generation in 2015, an 8-percent increase over the year before.<\/p>\n<p>So why are some utilities going against this trend \u2013 and risking a contest against more progressive competitors that are gaining market share at their expense?<\/p>\n<p>To understand why, it helps to have a closer look at Ohio-based FirstEnergy, a large investor-owned energy company with operations in six states that has become the poster child for resistant utilities.<\/p>\n<p>The FirstEnergy case also illustrates why companies that refuse change won\u2019t be able to stop the <a href=\"https:\/\/www.edf.org\/blog\/2016\/01\/13\/state-union-2-clean-energy-developments-you-may-have-missed\">rising clean energy tide<\/a>, no matter how hard they try.<!--more--><\/p>\n<p><strong>A $4-billion fossil bailout paid for by consumers<\/strong><\/p>\n<p>At the moment, FirstEnergy has an expensive proposal \u2013 to the tune of nearly $4 billion \u2013 before the Public Utilities Commission of Ohio to protect its inefficient, polluting and unprofitable fleet of power plants.<\/p>\n<p>The utility has been trying to convince regulators to prop up its plants for the next eight years, essentially saddling people in Ohio with the cost of FirstEnergy\u2019s coal and nuclear investments.<\/p>\n<p>The company needs the money because it\u00a0doubled down \u00a0on dirty power plants that became uneconomical when natural gas prices dropped and energy efficiencies took a bite out of the company\u2019s revenues. These decades-old energy assets are now at risk of getting stranded as power costs drop.<\/p>\n<p>If FirstEnergy prevails in the case it would be able to secure revenues \u2013 well above what the market would provide \u2013 from its uneconomical nuclear and coal plants through 2024, even if\u00a0<a href=\"http:\/\/www.bloomberg.com\/news\/articles\/2016-01-25\/cutting-pollution-from-u-s-power-plants-cheaper-than-you-think\">less expensive electricity<\/a> became available elsewhere.<\/p>\n<p>[Tweet &#8220;Why this Utility Giant&#8217;s $4-billion Coal Bailout is an Ill-Fated Energy Strategy&#8221;]<br \/>\n<strong>Competitors: We\u2019ll sell cleaner energy for less<\/strong><\/p>\n<p>Other power producers say the FirstEnergy deal is nonsensical.<\/p>\n<p>Exelon has <a href=\"https:\/\/www.edf.org\/media\/leading-power-producer-joins-critics-firstenergys-bailout\">challenged<\/a> FirstEnergy\u2019s proposal and offered to provide carbon-free energy at a lower price for the same time period.\u00a0And major utility Dynegy recently\u00a0<a href=\"http:\/\/www.utilitydive.com\/news\/dynegy-offers-natural-gas-alternative-to-firstenergy-aep-plant-subsidy-pro\/412015\/\">proposed<\/a>\u00a0that it, too, can meet Ohio\u2019s electric demand more competitively than FirstEnergy\u2019s subsidized power plants.<\/p>\n<p>These companies\u2019 alternative deals would not only avoid the multibillions in subsidy costs, but also provide multibillions of dollars in savings.\u00a0Time is on their side as well, because <a href=\"http:\/\/thinkprogress.org\/climate\/2016\/01\/27\/3712181\/renewables-surpass-coal-2030\/\">cleaner energy<\/a> is on the move regardless of the outcome in the Ohio utility rate case.<\/p>\n<p>Investment in renewable energy sources worldwide reached a record high of $329 billion in 2015, and came in spite of falling oil and gas prices. Today, there\u2019s a business case to be made for power sources such as sun and wind, and against carbon-based fuels that trap heat in the atmosphere.<\/p>\n<p><strong>These utilities get it<\/strong><\/p>\n<p>Not surprisingly, a number of American utilities are now taking steps to phase out coal, and invest in clean energy sources and <a href=\"https:\/\/www.edf.org\/climate\/demand-response\">energy efficiency programs<\/a>.<\/p>\n<p>California\u2019s three largest utilities will soon create roadmaps to incorporate more distributed energy resources, such as rooftop solar and electric vehicles, onto the grid.\u00a0In Illinois, electric and gas companies are partnering with environmental and consumer groups to dramatically increase adoption of smart thermostats in the state.\u00a0And in oil-rich Texas, the state\u2019s biggest electricity generator with a coal-heavy fleet, Luminant, recently\u00a0<a href=\"http:\/\/www.texastribune.org\/2015\/09\/08\/coal-dependent-power-company-eyes-west-texas-sun\/\">announced plans<\/a>\u00a0to power more than 50,000 homes with West Texas solar by late 2016.<\/p>\n<p>By bucking the tide of the global move to clean energy, FirstEnergy\u2019s strategy is ultimately doomed, because economics is now driving these changes. FirstEnergy, by clinging to old and dirty assets, will be on the losing end of the new energy economy.<\/p>\n<p><em>Photo credit:\u00a0<a href=\"http:\/\/bit.ly\/1efhMum\">24X7photo.com<\/a><\/em><\/p>\n<p><em>This post originally appeared on our\u00a0<a href=\"https:\/\/www.edf.org\/blog\/2016\/01\/29\/why-utility-giants-4-billion-coal-bailout-ill-fated-energy-strategy\">EDF Voices<\/a>\u00a0blog.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Clean energy investments are soaring worldwide, and the United States is no exception with $56 billion going toward renewable generation in 2015, an 8-percent increase over the year before. So why are some utilities going against this trend \u2013 and risking a contest against more progressive competitors that are gaining market share at their expense? &#8230;<\/p>\n","protected":false},"author":39893,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[42996,46898,28800,27600],"tags":[],"coauthors":[],"class_list":["post-12162","post","type-post","status-publish","format-standard","hentry","category-smart-power","category-firstenergy","category-ohio","category-utilities"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Why this Utility Giant&#039;s $4-billion Coal Bailout is an Ill-Fated Energy Strategy - Energy Exchange<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.edf.org\/energyexchange\/2016\/01\/29\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why this Utility Giant&#039;s $4-billion Coal Bailout is an Ill-Fated Energy Strategy - Energy Exchange\" \/>\n<meta property=\"og:description\" content=\"Clean energy investments are soaring worldwide, and the United States is no exception with $56 billion going toward renewable generation in 2015, an 8-percent increase over the year before. So why are some utilities going against this trend \u2013 and risking a contest against more progressive competitors that are gaining market share at their expense? ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/blogs.edf.org\/energyexchange\/2016\/01\/29\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\/\" \/>\n<meta property=\"og:site_name\" content=\"Energy Exchange\" \/>\n<meta property=\"article:published_time\" content=\"2016-01-29T15:51:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2016-03-24T15:24:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d1taatozpbffx3.cloudfront.net\/cdn\/farfuture\/EDJTYJUlnnGqPnAYt3km9prqOERW64XNomnoiPAtZ1s\/mtime:1454048564\/sites\/default\/files\/coal_287x235.jpg\" \/>\n<meta name=\"author\" content=\"Dick Munson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@dickmunson\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Dick Munson\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/01\\\/29\\\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/01\\\/29\\\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\\\/\"},\"author\":{\"name\":\"Dick Munson\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/#\\\/schema\\\/person\\\/f12d49c16b0a7cb5764ad0a839d09769\"},\"headline\":\"Why this Utility Giant&#8217;s $4-billion Coal Bailout is an Ill-Fated Energy Strategy\",\"datePublished\":\"2016-01-29T15:51:53+00:00\",\"dateModified\":\"2016-03-24T15:24:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/01\\\/29\\\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\\\/\"},\"wordCount\":614,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/01\\\/29\\\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d1taatozpbffx3.cloudfront.net\\\/cdn\\\/farfuture\\\/EDJTYJUlnnGqPnAYt3km9prqOERW64XNomnoiPAtZ1s\\\/mtime:1454048564\\\/sites\\\/default\\\/files\\\/coal_287x235.jpg\",\"articleSection\":[\"Clean Energy\",\"FirstEnergy\",\"Ohio\",\"Utility Business Models\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/01\\\/29\\\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/01\\\/29\\\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\\\/\",\"url\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/01\\\/29\\\/why-this-utility-giants-4-billion-coal-bailout-is-an-ill-fated-energy-strategy\\\/\",\"name\":\"Why this Utility Giant's $4-billion Coal Bailout is an Ill-Fated Energy Strategy - 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